Here’s how Bitcoin miners are preparing for bear markets

Bitcoin mining is a complex task: you need to have theoretical knowledge about the currency, have practical experience with mining equipment, and even be able to predict future behavior in the market. Bryan Johnson, director of mining investment service Minto, believes so.

In The conference World Digital Mining 2023At the conference held at the end of this September week, Johnson spoke about the decisions the company and other miners are making to mitigate risk in a bear market. Based on his experience, he points out that the three elements have the greatest impact on a miner’s performance future Bitcoin price, mining difficulty and short-term halving effects.

With this in mind, miners are proposing various scenarios about Bitcoin’s future behavior in order to prepare for the possible impact of the bear market. This allows them to develop strategies that protect profits or avoid disconnection from the network. Johnson pointed out in his speech that they usually prefer conservative and even a little pessimistic forecasts.

Therefore, they assume so The Bitcoin price will remain at current levels until 2024, the trading price is around $26,000. They also believe that the halving may not have as positive an impact on Bitcoin’s value as in other years, as the stricter regulatory environment could slow price growth. This vision is shared by other figures in the ecosystem, such as the CEO of Marathon, who believes that if liquidity in the Bitcoin market does not increase, there will be no new price levels.

Regarding the mining difficulty, Johnson expects it to continue to decline as it did between 2022 and 2023. Above all, they point out that the Bitcoin hash rate decline and difficulty will worsen after the halving, as many miners would see this profoundly if the reward decreases, this will have a negative impact on profitability. As we reported in CriptoNoticias, this is predicted 25% of ASIC miners would no longer generate profits after the halving.

In this scenario, Johnson recommends reducing electricity costs caused by mining. The use of surplus energy or government subsidies could save more than one miner from ceasing operations until further notice. However, keep this in mind 2024 will be a complex year with very limited profits for the industry if Bitcoin price does not enter an uptrend.

While some Bitcoiners are more conservative, others believe history would repeat itself The halving could be the engine to pull Bitcoin out of the bear market. This is how personalities like Plan B, the inventor of the stock-to-flow model, see it. Pantera Capital, on the other hand, expects the price after the halving to be in a range between $35,000 per unit and $140,000.